November 2, 2009

Digest of
Appellate Decisions
October 2009

Riddle v. WCAB (Allegheny City Electric, Inc.), 54 WAP 2008 (Pa. Supreme Ct. 2009)

Nationwide Mutual Fire Insurance Co. v. Bureau of Workers’ Compensation Fee Review Hearing Office and Hospital of the University of Pennsylvania, 1132 C.D. 2008 (Pa. Cmwlth. 2009)

Johnson v. WCAB ( Sealy Components Group), 763 C.D. 2009 (Pa. Cmwlth. 2009)

Reutzel. v. WCAB (Allegheny General Hospital), 448 C.D. 2009 (Pa. Cmwlth. 2009)

Harvey v. WCAB (Monongahela Valley Hospital), 333 C.D. 2009 (Pa. Cmwlth. 2009)

Graves v. WCAB (Philadelphia HousingAuthority), 142 C.D. 142 (Pa. Cmwlth. 2009)

Riddle v. WCAB (Allegheny City Electric, Inc.),
54 WAP 2008 (Pa. Supreme Ct. 2009)

WCJ erred in accepting earnings assessment report that did not include available positions for Claimant in the geographical area where work injury occurred, even though positions in the area of Claimant’s residence were reported.

The Pennsylvania Supreme Court reversed the decisions of the Commonwealth Court, the Board and the WCJ, which granted Employer’s petition to suspend Claimant’s benefits. Claimant had injured his shoulder in 2000 and began receiving full disability benefits. Employer contended that Claimant had fully recovered in 2004 and filed a termination petition. The WCJ denied the petition and allowed Claimant to amend the description of his injury.

Prior to this determination, Employer sought suspension of Claimant’s benefits, based on Claimant’s release by his treating physician. Employer alleged that Claimant had a residual earning capacity based on his recovery and provided the testimony of a vocational expert. The positions identified by the expert were in the surrounding counties, including the county were Claimant lived, and not located in Pittsburgh, where Claimant had previously worked. Claimant requested that the expert’s testimony be stricken on this basis, but the WCJ denied the request and relied on the testimony in granting the petition and reducing the benefits by $200 per week. Both the Board and Commonwealth Court ruled that Employer was not restricted to the Pittsburgh area when searching for comparable employment due to the location of Claimant’s residence.

On appeal, Claimant argued that the clear language of section 306(b) required that the employment survey was not competent evidence because it was not restricted to the Pittsburgh area only. For out-of-state employees, the Act required that such an employment survey be conducted in the usual employment area where the injury took place. The Court chose to be bound by the plain, mandatory language of the statute and rejected Employer’s argument that the Act allowed for determination of Claimant’s “true” earning power. This argument suggested that using the Pittsburgh area was a starting point, but that the Act allowed the survey to extend to the area near Claimant’s residence.

The Court reasoned that the sole purpose of section 306(b) was not to require an employer to submit actual jobs for an employee to fill, but rather to formulate a payment schedule for partial disability and provide a formula for calculating an injured employee’s benefits. Therefore, the location of the job injury was essential in order to insure an accurate calculation of benefits. The decision of Commonwealth Court was reversed and Employer’s suspension petition was denied. Justice Saylor filed a concurring opinion.

Nationwide Mutual Fire Insurance Co. v. Bureau of Workers’ Compensation Fee Review Hearing Office and Hospital of the University of Pennsylvania,
1132 C.D. 2008 (Pa. Cmwlth. 2009)

Objections made to Bureau of Workers’ Compensation Fee Review Hearing Office regarding medical bills submitted by healthcare provider to insurance must be filed within 90 days from the actual date of billing, not the date the bill was submitted to the insurer.

Commonwealth Court reversed the decision of the Bureau of Workers’ Compensation Fee Review Hearing Office, which ordered the Bureau of Workers’ Compensation Fee Review Section to consider the merits of Provider’s application for fee review. The Bureau determined that Provider’s application had been timely filed within 90 days of the original billing date of treatment as required by the Act. Claimant had been injured on the job on October 27, 2005 and was taken to Provider’s trauma center for treatment. Provider’s computer system created an electronic bill for the charges for Claimant’s care between October 27th and December 27th, however the date field of the bill read January 1, 2006. Provider outsourced its billing and that service mailed the electronic bill, along with supporting documentation to Insurer on January 20th.

Insurer received the bill on the 24th and paid $295,000 of the $857,000 billed. The billing service then submitted a number of applications for fee review with the Bureau, which were denied for technical reasons. Finally, the service filed the instant application disputing the amount of payment made by Insurer with the Bureau on April 13th. It was denied because it had been filed more than 90 days after the billing date, which the Bureau considered to be January 1st.

A hearing was held by the Fee Review Section, as requested by Provider, and the billing date was found to be January 20th, the date billing was sent to Insurer. Insurer took this appeal. Insurer countered that the date of the billing to be considered was January 1st, the date that appeared on the bill sent from Provider to its billing service. The Court agreed with this argument, relying on section 306(f.1)(5), which specified that disputes regarding timeliness were to be filed within 90 days after the original billing date. In such case, January 1st was the proper date to be considered. The Court was persuaded by the plain language of the statute, as well as need for cost containment, since to rule otherwise invited the type of litigation as seen in this case. Therefore, the decision below was reversed.

Johnson v. WCAB ( Sealy Components Group),
763 C.D. 2009 (Pa. Cmwlth. 2009)

Regulation 123.105(f) was invalidated by Commonwealth Court to the extent that it allowed consideration of petitions for review of previous IRE ratings absent a showing that a claimant’s current impairment rating met a 50 per cent threshold.

Commonwealth Court affirmed the decisions of the WCJ and the Board, which dismissed Claimant’s review petition that sought to set aside an impairment rating evaluation. Claimant sustained an injury in 2004 that was described as a pulmonary dysfunction. Two years later, Employer issued a notice of change in her disability status from total to partial disability based on an IRE determination that her impairment rating was 15 per cent. A year later, Claimant filed this petition requesting that the IRE be set aside, alleging that the rating doctor was not qualified to perform a pulmonary evaluation. Employer contended that Claimant’s petition should be dismissed because she first failed to obtain a determination that she met the threshold determination that her impairment rating was at least 50 per cent.

The WCJ determined that the Act did not require the rating doctor to be board certified in the area of medicine related to Claimant’s injury. Further, the WCJ held that Claimant failed to prove that the doctor’s qualifications had any relevance to his qualifications to perform the IRE, and that the doctor was qualified to perform the IRE. The WCJ dismissed Claimant’s petition.

On appeal, Claimant raised a constitutional argument that her rights were violated because her compensation was limited without a hearing on whether the doctor had the required qualifications to conduct the IRE. The Board affirmed the decision without addressing the constitutional argument. The Court first considered and rejected Claimant’s constitutional argument. The Court noted the sections of the Act and their related regulations that provided ample notice to a claimant and opportunity for hearing prior to modification of benefits. In this case, Claimant was permitted an immediate appeal when she was first notified by Employer of the change in her disability status. Since she filed her review petition a year later, she waived her immediate appeal rights and her due process arguments could not be heard at the later date.

The Court did invalidate the Bureau’s regulation at 34 Pa. Code Section 123.105(f) to the extent that it allowed an employee to challenge the validity of an initial IRE determination at any time during the 500-week partial disability period. Section 306(a.2)(4) of the Act imposed the requirement that there be a determination that the employee meet the threshold impairment rating equal or greater to 50 per cent impairment. To the extent that section 123.105(f) expanded the ability to challenge the IRE, it was invalidated. Therefore, the WCJ erred by ignoring the plain language of the Act and determining that Claimant properly filed her petition to review. Since Claimant did not produce the determination regarding a changed status in her IRE rating, the WCJ should have dismissed the petition on this basis alone. In view of this determination, the Court declined to rule on the merits of Claimant’s argument and affirmed the order of the Board.

Reutzel v. WCAB (Allegheny General Hospital),
448 C.D. 2009 (Pa. Cmwlth. 2009)

Claimant was not entitled to a second 500-week of partial disability benefits for a second injury that occurred one year after the initial injury; partial disability could continue until 500 weeks after the second injury.

Commonwealth Court affirmed the decisions of the WCJ and the Board, which partially granted Claimant’s petition to reinstate partial disability benefits. Claimant had sustained a shoulder injury in 1996 while working as a nurse. She received total disability benefits until she returned to work with the restriction of fewer hours at which time she received partial benefits. A year after the original injury, Claimant sustained a back injury but continued to work her reduced schedule. In 2003, Claimant underwent surgery to treat the 1997 injury and received total benefits again. When she returned to work three months later, she returned to the reduced benefit rate.

In a decision issued in 2004, the WCJ recognized the 1997 injury as work-related. Employer stopped paying Claimant’s partial benefits in 2006, contending that she had received 500 weeks of partial disability. Claimant filed the instant petition contending that the 500 weeks had run only on her first injury, and that she was entitled to continue to receive another 500 weeks of benefits for her second injury.

After filing the petition, Claimant resigned her position and began working for another employer, and ultimately worked five days a week. The WCJ determined that the Act did not allow for a separate 500-week period of benefits, but did allow for expiration after the 500-week period from the second injury had run. The WCJ also ruled that the rate of benefits had been improperly calculated and assessed a penalty against Employer of 50% of the difference between the correct amount of benefits and the amount paid. The Board agreed that the 500-week period started at the beginning of the partial disability, but that the two periods were to run concurrently, not consecutively.

On appeal, Claimant argued that the benefit period after the second injury was suspended and did not begin to run until her benefits for the first injury were exhausted. The Court agreed with the decisions below, reasoning that the Act intended to limit compensation when a claimant had been partially disabled in order to allow the claimant a period of time to adjust to the disability and maximize earnings consistent with the physical limitations of the disability. This approach was distinguished from total disability wherein a claimant had been left without an ability to earn and could make no such adjustments.

Finally, since Claimant could point to neither statutory nor common law authority that supported her position, the Court affirmed the decisions below and allowed for the extension of Claimant’s partial benefits.

Harvey v. WCAB (Monongahela Valley Hospital),
333 C.D. 2009 (Pa. Cmwlth. 2009)

Employer was not required to provide proof of available positions in order to prevail on modification petition where Claimant had been discharged for cause based on pre-injury actions that were made known to Employer after the work injury occurred.

Commonwealth Court affirmed the decisions of the Board and the WCJ, which granted Employer’s modification petitions. Claimant had worked for Employer as a registered nurse when she was involved in a motor vehicle accident while leaving Employer’s parking lot in 2001. During the investigation of the accident, police found two empty morphine vials in Claimant’s car, prompting Employer to conduct an investigation of Claimant’s handling of narcotic medications. Employer discovered four violations of its narcotic medication administration policy and discharged Claimant two weeks after the accident.

Claimant filed a claim petition in 2002, which was granted when the WCJ determined that Claimant’s injuries were caused in significant part by the absence of a barrier around the parking lot. The WCJ also determined that Claimant was properly discharged for reasons unrelated to her work injury. These findings were affirmed by the Board.

Employer filed a modification petition in 2006, alleging that work was available for Claimant under her set limitations had Claimant not been discharged for cause. Employer filed a second modification petition in 2007, based on an IRE of 25%. At hearing, Employer presented three positions available to Claimant had she held a current license as a registered nurse, and had she not been previously terminated. Employer also presented evidence of an IRE performed on Claimant showing a 25% disability rating.

Claimant presented the testimony of her doctor that stated that while Claimant could not perform the duties of a floor nurse, she could perform the positions identified by Employer on a part-time basis. The WCJ granted modification and reduced Claimant’s benefits as of the date of the first modification petition, and ruled that Employer did not have to actually offer Claimant the available positions due to her termination for cause. The WCJ went on to find in favor of Employer in the second petition, based on the IRE and independent of the first modification. The Board affirmed the decision and agreed that Claimant need not have been offered a position because Employer was not required to perform a futile act.

On appeal, the Court agreed that Employer was not compelled under the Act to actually refer the job openings to Claimant. The Court distinguished case law which required an employer to show job availability when an employee was terminated after a work injury for job inadequacies known to employer prior to the injury. Herein, Employer was not aware of Claimant’s misconduct until after the injury, and acted swiftly and openly to address it. Claimant was discharged nine days after Employer began its investigation. Therefore, the WCJ’s consideration of Claimant’s pre-injury misconduct was appropriate.

Finally, Claimant raised the issue of the timeliness of the performance of the IRE. The Court declined to hear this objection because Claimant had failed to raise the issue before the WCJ and preserve the issue for appeal. Judge McGinley dissented with that part of the decision that excused Employer from providing proof of available work in order to suspend benefits.

Graves v. WCAB (Philadelphia HousingAuthority),
142 C.D. 142 (Pa. Cmwlth. 2009)

WCJ properly relied on opinion of Employer’s expert, which was based on hearing Claimant’s testimony at hearing, not a report of Claimant’s actions from an investigative report compiled by Employer.

Commonwealth Court affirmed the decisions of the WCJ and the Board, which denied Claimant’s claim petition, finding that he was not injured in the scope of his employment. Claimant was employed as a patrol officer assigned to Employer’s housing projects. Claimant was injured in 2006 by several gunshots. At the time of injury, Claimant was off-duty and was not at a housing project. Instead, Claimant was at a private party at a bar several miles away. The shooting took place at 2:00 a.m. Claimant asserted that he had acted to break up a fight, had identified himself as a police officer and was shot after his assailant was ejected from the bar. Claimant reasoned that he had been acting to protect the public therefore his injury took place in the course of his employment.

Upon investigation, Employer determined that Claimant had been employed as a bouncer in the bar and the shooting did not take place upon the assailant’s ejection, the assailant had merely shot through the bar door when he was ejected and Claimant was injured as a result of standing next to the door. Employer contended that Claimant’s actions were not consistent with appropriate police response and were therefore outside the scope of his employment. Claimant’s petition was denied, as the WCJ did not find his testimony to be credible. The WCJ believed the testimony of Employer’s witness, its assistant chief of police.

On appeal, Claimant contended that the WCJ’s reliance on this testimony was error, since the testimony was impermissibly based on the investigative report compiled by Employer, which Claimant argued was hearsay. The Court initially determined that the report was not hearsay. However, even if it had been hearsay, the WCJ did not error in relying on the assistant chief’s testimony, since his opinion was based on Claimant’s in-court testimony of the events that took place, not on the report of the events in the investigation. Therefore, the WCJ’s determination was based on substantial, competent evidence and was left to stand. Judge McCloskey dissented and contended that Claimant’s alleged failure to follow proper police procedures did not remove him from the scope of his employment so as to leave him ineligible for benefits.

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